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CPG companies talk M&A at CAGNY

Smucker's Uncrustables brand peanut butter and grape jelly sandwiches.

Photo: Daniel Acker/Bloomberg via Getty Images

Leading consumer packaged goods companies presenting at CAGNY this week offered updates on their respective M&A strategies.

Why it matters: If the presenting companies are to be believed, 2023 could be an active year for dealmaking in food and beverage.

Details: J.M. Smucker discussed the strength of its at-home coffee business, consisting of Folgers, Cafe Bustelo and Dunkin', and said it is looking for more acquisitions to expand the category.

  • The parent of Jif peanut butter and Uncrustables also provided more details on the rationale for selling its dog food business to Post Holdings for $1.2 billion.
  • J.M. Smucker said its pet portfolio now focuses on the higher-growth, higher-margin businesses of Milk-Bone pet snacks and Meow Mix cat food.
  • It said the misperception is that these categories are bundled, when in fact retailers see them differently, so there weren't advantages to keeping them together.
  • The company will continue to look for more acquisitions of pet snacks and cat food.

Meanwhile, The Clorox Co. said it is strengthening its core business and continues to see M&A as a strategic lever, though it didn't provide details.

  • Constellation Brands said it seeking small acquisitions to fill any gaps in its wine, beer and spirits businesses.
  • Kerry Group, a maker of ingredients for the food and beverage industry, said to expect bolt-on M&A similar to what it has done in the past in the next phase of the business.
  • Nomad Foods, a maker of frozen food products in Europe under the Birds Eye and Iglo brands, noted whitespace for the company geographically in Eastern Europe and that M&A remains a crucial aspect of its business.
  • Likewise, food distributor Performance Food Group cited M&A as second best use for cash and it is constantly reviewing deals, noting its buys of food product supplier Reinhart and convenience store food distributor Core-Mark as examples.
  • Sysco, a foodservice distributor, said it could use tuck-in acquisitions to expand the business geographically.
  • The Kellogg Co., as previously announced, is retaining its plant-based MorningStar Farms unit but will continue with the spinoff of its North American cereal business into a separate company, allowing it to focus on snacks.
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